Dow climbs in early Friday action as Wall Street attempts to cap tumultuous trading week with an upswing

Stock benchmarks on Friday rose modestly higher as investors looked to close out a volatile, holiday-shortened week that has the tech-heavy Nasdaq Composite on track for its biggest weekly loss since the height of the pandemic-induced market selloff in March.

How are major benchmarks trading?

The Dow Jones Industrial Average

rose 117 points, or 0.4%, to around 27,650, while the S&P 500

gained 14 points, or 0.4%, to trade at 3,353. The Nasdaq Composite Index

climbed 48 points, or 0.5%, at 10,952. But all three benchmarks were trading off their intraday peak near the open, highlighting the week’s choppy action.

The Dow on Thursday fell 405.89 points, or 1.5%, to close at 27,534.58, while the S&P 500 ended with a loss of 59.77 points, or 1.8%, at 3,339.19. The Nasdaq Composite fell 221.97 points, or 2%, to finish at 10,919.59. Through Thursday, the Dow was down 2.1% for the week, while the S&P 500 was off 2.6% and the Nasdaq was 3.5% lower; markets were closed Monday for Labor Day.

What’s driving the market?

A decline in the S&P 500 index for the week would mark the benchmark’s first back-to-back weekly drop since May.

“While monetary policy is set to remain supportive for several more quarters, valuations are high across assets and volatility is resurfacing,” said Elia Lattuga, co-head of strategy research at UniCredit Bank, in a note. “The breadth of the rally is still limited and the recovery uneven—hence developments in the economic outlook and political risks represent significant threats to risk appetite.”

Stocks were unable to follow through Thursday on a Wednesday bounce that saw equities recover somewhat from a three-day, tech-led rout that pushed the Nasdaq into correction territory, falling more than 10% from its record close set last week.

Weakness on Thursday was partly tied to the inability of U.S. politicians to agree on a new coronavirus rescue package after Democrats blocked a Republican bill on the Senate floor, leaving the way forward unclear, analysts said.

Meanwhile, investors have fretted that the sharp rally that took stocks from their March pandemic lows to new all-time highs had left valuations significantly stretched for the large-cap, tech-related stocks that had led the rally this year. Among those highfliers, shares of Apple Inc.

 and Netflix Inc.

 were on track for weekly declines of more than 6%, while Facebook Inc.

 is off more than 5%.

In U.S. economic news, the consumer-price index for August rose 0.4% last month, beating average economists’ estimates for a rise of 0.3% but falling below the past two months at 0.6%. On a year-over-year basis, the CPI increased 1.3% after gaining 1.0% in July, the Labor Department said on Friday

Looking ahead, Federal budget figures for August are due at 2 p.m. Eastern.

Which companies are in focus?
What are other markets doing?

The yield on the 10-year Treasury note

 rose 0.4 basis point to 0.687%. Bond prices move inversely to yields.

The ICE U.S. Dollar Index
which tracks the performance of the greenback against its major rivals, fell 0.1%.

Gold futures

were off 0.3% at $1,958 an ounce, threatening to snap a three-day winning streak. The U.S. crude oil benchmark

 fell 16 cents, or 0.5%, to $37.13 a barrel.

The Stoxx Europe 600 index

 was edging 0.1% lower, while the U.K.’s benchmark FTSE

rose 0.2%. In Asia, Hong Kong’s Hang Seng Index

and the Shanghai Composite Index

 both rose 0.8%, while Japan’s Nikkei

rose 0.7%.

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Citigroup’s Fraser shows Wall Street playing catch-up on woman CEOs By Reuters

© Reuters. Citigroup Latin America CEO Fraser addresses Brazil-U.S. Business forum

By Jessica DiNapoli

NEW YORK (Reuters) – Citigroup Inc’s (N:) appointment of Jane Fraser as its next chief executive on Thursday was celebrated on Wall Street as the first woman to lead one of the top U.S. banks. Yet this is a glass ceiling that corporate America shattered decades ago.

It was 1972 when the Washington Post, then a Fortune 500 company, named Katherine Graham (NYSE:) as its CEO. While progress for female leaders has been slow, 36 of the Fortune 500 companies are now run by women, including automaker General Motors Co (N:), chocolate maker Hershey Co (N:) and Northrop Grumman Corp (N:), according to corporate governance services firm BoardEx.

The male-dominated financial services industry has fared poorly. Even beyond the major banks, only four of the 200 largest public U.S. financial services companies – Synchrony Financial (N:), Franklin Resources Inc (N:), Nasdaq Inc (O:) and CIT Group Inc (N:) – have female CEOs, according to BoardEx.

“These are really positions that women have not pursued because of the work-life balance. We have seen years and years of struggle for women who have to choose,” said Charlotte Laurent-Ottomane, executive director of the Thirty Percent Coalition, which encourages diversity in corporate boardrooms.

CEO candidates typically come from roles in finance, operations or running a business line, where there are few women leaders, according to a study from accounting and consulting firm Deloitte.

Women have higher representation in roles that historically have not been heavily recruited for the top job, such as in legal or human resources departments, according to the study.

Fraser, 53, has been a rising star in the financial industry, with a career that spans investment banking, wealth management, troubled mortgage workouts and strategy in Latin America – a key business for Citigroup. She was being groomed for the top job after she was elevated to Citigroup president last year.

Among the Citigroup board directors who tapped Fraser as CEO, 8 of 17 are women, compared to about a quarter at most other U.S. banks.

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Wall Street Breakfast: Race To The Bottom For Central Banks

Futures steady following big tech rebound

U.S. equity index futures are pausing for breath, with the Nasdaq nominally higher and the Dow and S&P 500 inching lower, after Wall Street snapped its tech losing streak on Wednesday. Tesla (NASDAQ:TSLA) shares rebounded nearly 11% after suffering their biggest one-day percentage drop in history, while Apple (NASDAQ:AAPL) gained 4% to bring its market cap back to $2T. On the economic calendar today is the release of U.S. weekly jobless claims as Congress remains deadlocked over a fresh coronavirus stimulus package. While Senate Republicans have united around a “skinny” bill, Democrats oppose the measure, and it isn’t expected to clear its first procedural hurdle in the Senate today.

Brexit is getting messy again

The EU and the U.K. are holding emergency talks after the latter published its Internal Market Bill, which would undercut parts of the Withdrawal Agreement agreed to in January. The news could also damage trade talks as both sides work to secure a new deal. Without an agreement, nearly $1T in trade could be thrown into chaos at the beginning of the year, but some say the “game of Brexit chicken” may be part of the negotiating strategy. Adding to the turmoil, U.S. House Speaker Nancy Pelosi said any potential U.S.-U.K. trade deal would not pass Congress if Britain undermines the Good Friday peace agreement.

Avoiding a full TikTok sale

TikTok owner ByteDance (BDNCE) and the U.S. government are in discussions over possible ways allowing for something less than a full sale of TikTok’s U.S. operations, WSJ reports. The talks follow acts by China’s government that throw some roadblocks at such a sale (like new restrictions on the export of AI technology) and with a nearing deadline for TikTok to agree to a sale or be shut down. ByteDance has been considering options that include a sale to a team of Microsoft (NASDAQ:MSFT) and Walmart (NYSE:WMT), or to a group including Oracle (NYSE:ORCL).

Hot year for listings in Hong Kong

The number of U.S.-listed Chinese companies securing secondary listings in Hong Kong is growing, as Yum China (NYSE:YUMC) joined the group after raising the equivalent of $2.2B by selling new stock. Nasdaq-listed hotelier Huazhu Group (NASDAQ:HTHT) has also started taking orders for a $970M stock sale ahead of its planned secondary listing in Hong Kong on Sept. 22. Why the alternative listings? The U.S. Senate passed a bill in June that could ban many Chinese companies from listing on American exchanges amid escalating tensions between the world’s two largest economies. A Hong Kong listing also means a company’s stock can be traded during Asian hours, broadening its investor base, while shares can be added to the Hong Kong Stock Connect, giving access to mainland investors
Go Deeper: Alibaba, and NetEase have also completed listings in Hong Kong.

BP takes first step into offshore wind

BP (NYSE:BP) is continuing its seismic strategy shift in abandoning the oil major business model, making its first venture into offshore wind power with a $1.1B purchase of U.S. assets from Norway’s Equinor (NYSE:EQNR). The British firm will receive a 50% stake in the Empire Wind and Beacon Wind developments off New York and Massachusetts, respectively, while Equinor will retain 50% in both, and continue to act as the operator. Just six months after taking the helm, BP CEO Bernard Looney said in August he’d shrink oil and gas output by 40% over the next decade and spend as much as $5B a year building one of the world’s largest renewable power businesses.

Walmart takes another page from the Amazon playbook

Partnering with end-to-end delivery firm Flytrex, Walmart (WMT) launched a pilot program this week to test using drones to deliver groceries and household essentials in Fayetteville, North Carolina. Even though it is expected to be a long time before drones are widely used for deliveries, the company hopes to gain insight by using the technology. Besides mirroring Amazon’s (NASDAQ:AMZN) Prime Air program, Walmart also announced its Walmart+ membership program last week that will take on Amazon Prime.

Rental market blues

There were more than 15,000 empty rental apartments in Manhattan in August, up from 5,600 a year ago, as more New Yorkers fled the city amid the coronavirus crisis, according to a report from Douglas Elliman and Miller Samuel. The inventory of empty units is the largest ever recorded since data started being collected 14 years ago, dashing hopes for a rebound in the fall or the end of 2020. While REITs and real estate companies have more access to capital, smaller landlords may have trouble paying their mortgages and property taxes, which could impact banks and lenders.

How many planes are needed to deliver a coronavirus vaccine?

Dubbing it the “largest single transport challenge ever,” the International Air Transport Association called on governments to start “careful planning with industry stakeholders” for the large-scale delivery of a coronavirus vaccine. “Just providing a single dose to 7.8B people would fill 8,000 (Boeing) 747 cargo aircraft,” according to the air transport body. The IATA also cautioned that “while there are still many unknowns (number of doses, temperature sensitivities, manufacturing locations, etc.), it is clear that the scale of activity will be vast, that cold chain facilities will be required and that delivery to every corner of the planet will be needed.”
Go Deeper: The end of COVID-19 airport screenings for international travelers?

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Wall Street sees a bright side in ‘healthy’ tech selloff By Reuters

© Reuters. FILE PHOTO: A street sign is seen in front of the New York Stock Exchange on Wall Street in New York

By Lewis Krauskopf

NEW YORK (Reuters) – Some of Wall Street’s biggest players are viewing the stock market’s recent tech-led selloff as a bout of turbulence rather than the start of a longer slide — and they don’t see it as a reason to run for the door.

Invesco this week called the Nasdaq’s sharp decline a “healthy period of consolidation” while fund manager Lord Abbett said U.S. stock valuations are likely merited, based on an analysis of companies’ earnings.

On Sept. 4, Goldman Sachs (NYSE:) reiterated its year-end price target of 3,600 on the S&P 500, roughly 6% above the index’s close on Wednesday, while UBS Global Wealth Management recommended clients “ease into the markets” rather than stay on the sidelines.

Their optimism highlights how the Federal Reserve’s pledge to keep interest rates at record lows and hopes of a breakthrough in a vaccine for COVID-19 have underpinned market gains this year, though many remain wary that the U.S. presidential election and massive options bets on tech-related stocks could exacerbate market swings in the remaining months of 2020.

“What we think we are going through is a healthy correction, removing the froth,” said Troy Gayeski, co-chief investment officer of SkyBridge, an alternative investments firm. “We certainly could fall more. But if you’re a tech investor you had to understand that the valuations were very high.”

The Nasdaq posted its best day since April on Wednesday, a day after falling into correction territory, commonly defined as a fall of 10% or more from a recent peak. The other major indexes also rebounded on Wednesday after steep declines.

“I think of this rout not so much as a correction, but as a digestion,” Kristina Hooper, Invesco’s chief global market strategist, said in a recent note.

Second-quarter reported earnings on the S&P 500 were 23.1% above expectations, far above the trailing five-year average of 4.7%, analysts at Lord Abbett said in a recent note.

“Earnings momentum, and the magnitude of analyst earnings revisions, is outpacing that in other markets, suggesting that higher valuations on U.S. equities are merited,” the report said.

Still, some believe more volatility is in store. A recent poll of investors from UBS Global Wealth Management showed 65% viewed politics as their top concern, with the Nov. 3 U.S. presidential election just weeks away.

Prominent investor Stanley Druckenmiller – a skeptic of this year’s rally – again sounded a bearish note on Wednesday, warning on CNBC that the stock market is in a mania fueled by the Federal Reserve.

Uncertainty over huge options purchases by SoftBank Group Corp (T:) also hung over markets, creating another risk.

Gayeski, of Skybridge, said he could see an opportunity to increase equity risk if there was a sharper drop, such as the Nasdaq falling 20% or the S&P 500 declining 15% from their respective highs and there were other supportive signs for the market such as the Fed’s expanding its balance sheet further.

Any selling that spreads beyond the big tech-related stocks that have led markets higher could be an indication that the pullback may be extending further, said Willie Delwiche, an investment strategist at Baird.

In the coming days, Delwiche is looking for signs of increasing investor caution — such as buying of put options, outflows from equity funds and diminishing bullish views in surveys — that indicate any over-exuberance has waned.

Another indicator is how investors respond to key technical support levels, said Keith Lerner, chief market strategist for Truist/SunTrust Advisory. The Nasdaq, for example, on Tuesday closed below its 50-day moving average for the first time since April, but was back above it on Wednesday.

“If you see these markets just slice through support levels, that’s a sign that the sellers have the upper hand,” Lerner said.

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Asian stocks mixed as investors wait for Wall Street to return from break

Japan’s Mount Fuji is seen during morning hours from Tokyo on April 23, 2020.

charly triballeau/Agence France-Presse/Getty Images

Asian shares were mixed Tuesday, after European stocks rallied and U.S. markets were closed for the Labor Day national holiday.

Investors are focusing on uncertainties over the coronavirus pandemic and hopes for a vaccine. Attention is now on how Wall Street might pick up after the holiday break, given the decline that came last week after months of surging prices.

Japan’s benchmark Nikkei 225

gained 0.4%. Australia’s S&P/ASX 200

added 0.8%. South Korea’s Kospi

gained 0.5%. Hong Kong’s Hang Seng

was down 0.5%, while the Shanghai Composite

slipped 0.3%.

“Traders and investors alike may slowly but surely come around to the idea that last week’s market rout was tech sector-specific, rather than any real change in underlying sentiment,” said Stephen Innes, chief global markets strategist at AxiCorp.

“There was nothing ‘fundamental’ behind last week’s equity sell-off, but it will most certainly take a while to clear all the option-market after-shocks,” he said.

Wall Street’s slide on Friday followed a Labor Department report that showed U.S. hiring slowed to 1.4 million last month. That was the fewest jobs added since the economy started bouncing back from the initial shock of the pandemic. The United States has recovered about half the 22 million jobs lost during the crisis.

In Europe, another round of Brexit trade talks is scheduled in London for later in the day. On Monday, the European Union warned the British government that any attempt to renege on commitments made ahead of its departure from the bloc earlier this year could put at risk the hard-won peace in Northern Ireland. Britain left the bloc on Jan. 31, but the two sides are in a transition period that ends at the end of this year and are negotiating their future trade ties.

Riki Ogawa at the Asia & Oceania Treasury Department at Mizuho Bank in Singapore warned that plenty of other uncertainties remained, such as President Donald Trump’s comments about “decoupling” the U.S. economy from China, as the presidential campaign heats up.

The Asian region depends heavily on a healthy Chinese economy, and trade with the U.S., as well as with China.

“We appear to be short on clarity,” said Ogawa.

Benchmark U.S. crude

fell nearly 2% to $38.99 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude,

the international standard, added slipped 5 cents to $41.96 per barrel.

The dollar inched down to 106.26 Japanese yen

from 106.27 yen. The euro

fell to $1.1811 from $1.1817.

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